Cisco facts for kids

Quick facts for kids
Cisco Systems, Inc.

Building 10 of the Cisco San Jose Main Campus
Type	Public
Traded as	NASDAQ: CSCO Nasdaq-100 component DJIA component S&P 100 component S&P 500 component
Industry	Networking hardware Networking software
Founded	December 10, 1984; 40 years ago (1984-12-10) in San Francisco, California, U.S.
Founders	Leonard Bosack Sandy Lerner
Headquarters	San Jose, California , U.S.
Area served	Worldwide
Key people	Chuck Robbins (CEO & chairman)
Products	List of Cisco products
Revenue	US$56.99 billion (2023)
Operating income	US$15.03 billion (2023)
Net income	US$12.61 billion (2023)
Total assets	US$101.8 billion (2023)
Total equity	US$44.35 billion (2023)
Number of employees	c. 84,900 (2023)
Footnotes / references Financials as of July 29,  2023 (2023 -07-29)[update].

Cisco Systems, Inc. (using the trademark Cisco) is an American multinational digital communications technology conglomerate corporation headquartered in San Jose, California. Cisco develops, manufactures, and sells networking hardware, software, telecommunications equipment and other high-technology services and products. Cisco specializes in specific tech markets, such as the Internet of things (IoT), domain security, videoconferencing, and energy management with leading products including Webex, OpenDNS, Jabber, Duo Security, Silicon One, and Jasper.

Cisco Systems was founded in December 1984 by Leonard Bosack and Sandy Lerner, two Stanford University computer scientists who had been instrumental in connecting computers at Stanford. They pioneered the concept of a local area network (LAN) being used to connect distant computers over a multiprotocol router system. The company went public in 1990 and by the end of the dot-com bubble in the year 2000, had a market capitalization of $500 billion, surpassing Microsoft as the world's most valuable company.

Cisco stock (CSCO) was added to the Dow Jones Industrial Average on June 8, 2009, and is also included in the S&P 500, Nasdaq-100, the Russell 1000, and the Russell 1000 Growth Stock indices.

History

1984–1995: Origins and initial growth

Cisco's first router, the Advanced Gateway Server (AGS) router (1986)

Cisco Systems was founded in December 1984 by Sandy Lerner along with her husband Leonard Bosack. Lerner was the director of computer facilities for the Stanford University Graduate School of Business. Bosack was in charge of the Stanford University computer science department's computers.

Cisco's initial product has roots in Stanford University's campus technology. In the early 1980s students and staff at Stanford, including Bosack, used technology on the campus to link all of the school's computer systems to talk to one another, creating a box that functioned as a multiprotocol router called the "Blue Box". The Blue Box used circuitry made by Andy Bechtolsheim, and software that was originally written at Stanford by research engineer William Yeager. Due to the underlying architecture, and its ability to scale well, Yeager's well-designed invention became a key to Cisco's early success.

In 1985, Bosack and Stanford employee Kirk Lougheed began a project to formally network Stanford's campus. They adapted Yeager's software into what became the foundation for Cisco IOS, despite Yeager's claims that he had been denied permission to sell the Blue Box commercially. On July 11, 1986, Bosack and Lougheed were forced to resign from Stanford and the university contemplated filing criminal complaints against Cisco and its founders for the theft of its software, hardware designs, and other intellectual properties. In 1987, Stanford licensed the router software and two computer boards to Cisco. In addition to Bosack, Lerner, Lougheed, Greg Satz (a programmer), and Richard Troiano (who handled sales), completed the early Cisco team. The company's first CEO was Bill Graves, who held the position from 1987 to 1988. In 1988, John Morgridge was appointed CEO.

The name "Cisco" was derived from the city name San Francisco, which is why the company's engineers insisted on using the lower case "cisco" in its early years. The logo is intended to depict the two towers of the Golden Gate Bridge.

On February 16, 1990, Cisco Systems went public with a market capitalization of $224 million, and was listed on the NASDAQ stock exchange. On August 28, 1990, Lerner was fired. Upon hearing the news, her husband Bosack resigned in protest.

Although Cisco was not the first company to develop and sell dedicated network nodes, it was one of the first to sell commercially successful routers supporting multiple network protocols. Classical, CPU-based architecture of early Cisco devices coupled with flexibility of operating system IOS allowed for keeping up with evolving technology needs by means of frequent software upgrades. Some popular models of that time (such as Cisco 2500) managed to stay in production for almost a decade virtually unchanged. The company was quick to capture the emerging service provider environment, entering the SP market with product lines such as Cisco 7000 and Cisco 8500.

Between 1992 and 1994, Cisco acquired several companies in Ethernet switching, such as Kalpana, Grand Junction and most notably, Mario Mazzola's Crescendo Communications, which together formed the Catalyst business unit. At the time, the company envisioned layer 3 routing and layer 2 (Ethernet, Token Ring) switching as complementary functions of different intelligence and architecture—the former was slow and complex, the latter was fast but simple. This philosophy dominated the company's product lines throughout the 1990s.

In 1995, John Morgridge was succeeded by John T. Chambers.

1996–2005: Internet and silicon intelligence

John T. Chambers led Cisco as its CEO between 1995 and 2015. (Pictured at 2010 World Economic Forum, in Davos, Switzerland).

The Internet Protocol (IP) became widely adopted in the mid-to-late 1990s. Cisco introduced products ranging from modem access shelves (AS5200) to core GSR routers, making them a major player in the market. In late March 2000, at the height of the dot-com bubble, Cisco became the most valuable company in the world, with a market capitalization of more than $500 billion. As of July 2014, with a market cap of about US$129 billion, it was still one of the most valuable companies.

The perceived complexity of programming routing functions in silicon led to the formation of several startups determined to find new ways to process IP and MPLS packets entirely in hardware and blur boundaries between routing and switching. One of them, Juniper Networks, shipped their first product in 1999 and by 2000 chipped away about 30% from Cisco SP Market share. In response, Cisco later developed homegrown ASICs and fast processing cards for GSR routers and Catalyst 6500 switches. In 2004, Cisco also started the migration to new high-end hardware CRS-1 and software architecture IOS XR.

2006–2012: The Human Network

Russian President Dmitry Medvedev and California Gov. Arnold Schwarzenegger at Cisco, 2010

As part of a rebranding campaign in 2006, Cisco Systems adopted the shortened name "Cisco" and created "The Human Network" advertising campaign. These efforts were meant to make Cisco a "household" brand—a strategy designed to support the low-end Linksys products and future consumer products.

On the more traditional business side, Cisco continued to develop its routing, switching and security portfolio. The quickly growing importance of Ethernet also influenced the company's product lines. Limits of IOS and aging Crescendo architecture also forced Cisco to look at merchant silicon in the carrier Ethernet segment. This resulted in a new ASR 9000 product family intended to consolidate the company's carrier Ethernet and subscriber management business around EZChip-based hardware and IOS-XR.

Throughout the mid-2000s, Cisco also built a significant presence in India, establishing its Globalization Centre East in Bangalore for $1 billion. Cisco also expanded into new markets by acquisition—one example being a 2009 purchase of mobile specialist Starent Networks.

Cisco continued to be challenged by both domestic competitors Alcatel-Lucent, Juniper Networks, and an overseas competitor Huawei. Due to lower-than-expected profit in 2011, Cisco reduced annual expenses by $1 billion. The company cut around 3,000 employees with an early-retirement program who accepted a buyout and planned to eliminate as many as 10,000 jobs (around 14 percent of the 73,400 total employees before curtailment). During the 2011 analyst call, Cisco's CEO John Chambers called out several competitors by name, including Juniper and HP.

On July 24, 2012, Cisco received approval from the EU to acquire NDS (a TV software developer) for US$5 billion. In 2013, Cisco sold its Linksys home-router unit to Belkin International Inc., signaling a shift to sales to businesses rather than consumers.

2013–present

Former Portuguese President Cavaco Silva, former Cisco CEO John Chambers and Cisco Senior Director of Innovation Helder Antunes, during the 2011 presidential visit to the US

On July 23, 2013, Cisco Systems announced a definitive agreement to acquire Sourcefire for $2.7 billion. On August 14, 2013, Cisco Systems announced it would cut 4,000 jobs from its workforce, which was roughly 6%, starting in 2014. At the end of 2013, Cisco announced poor revenue due to depressed sales in emerging markets, caused by economic uncertainty and by fears of the National Security Agency planting backdoors in its products.

In April 2014, Cisco announced funding for early-stage firms to focus on the Internet of Things. The investment fund was allocated to investments in IoT accelerators and startups such as The Alchemist Accelerator, Ayla Networks and EVRYTHNG. Later that year, the company announced it was laying off another 6,000 workers or 8% of its global workforce, as part of a second restructuring. On November 4, 2014, Cisco announced an investment in Stratoscale.

On May 4, 2015, Cisco announced CEO and Chairman John Chambers would step down as CEO on July 26, 2015, but remain chairman. Chuck Robbins, senior vice president of worldwide sales & operations and 17-year Cisco veteran, was announced as the next CEO. On July 23, 2015, Cisco announced the divestiture of its television set-top-box and cable modem business to Technicolor SA for $600 million, a division originally formed by Cisco's $6.9 billion purchase of Scientific Atlanta. The deal came as part of Cisco's gradual exit from the consumer market, and as part of an effort by Cisco's new leadership to focus on cloud-based products in enterprise segments. Cisco indicated that it would still collaborate with Technicolor on video products. On November 19, 2015, Cisco, alongside ARM Holdings, Dell, Intel, Microsoft and Princeton University, founded the OpenFog Consortium, to promote interests and development in fog computing.

In January 2016, Cisco invested in VeloCloud, a software-defined WAN (SD-WAN) start-up with a cloud offering for configuring and optimizing branch office networks. Cisco contributed to VeloCloud's $27 million Series C round, led by March Capital Partners.

In February 2017, Cisco launched a cloud-based secure internet gateway, called Cisco Umbrella, to provide safe internet access to users who do not use their corporate networks or VPNs to connect to remote data centers. Immediately after reporting their fourth-quarter earnings for 2017, Cisco's price-per-share value jumped by over 7%, while its earnings per share ratio increased from 60 to 61 cents per share, due in part to Cisco's outperformance of analyst expectations. In September 2017, Chambers announced that he would step down from the executive chairman role at the end of his term on the board in December 2017. On December 11, 2017, Robbins was elected to succeed Chambers as executive chairman while retaining his role as CEO, and Chambers was given the title of "Chairman Emeritus".

Reuters reported that "Cisco Systems Inc's (CSCO.O) product revenue in Russia grew 20 percent in 2017, ahead of Cisco's technology product revenue growth in the other so-called BRIC countries of Brazil, China and India."

On May 1, 2018, Cisco Systems agreed to buy AI-driven business intelligence startup Accompany for $270 million. As of June 2018, Cisco Systems ranked 444th on Forbes Global 2000 list, with $221.3 billion market cap.

In 2019, Cisco acquired CloudCherry, a customer experience management company, and Voicea, an artificial intelligence company.

In 2019, Cisco also introduced the "Silicon One" ASIC chip with the G100 model reaching a speed of 25.6 Tbit/s. The Silicon One competes against the Tomahawk series by Broadcom the Nvidia Spectrum, the Marvell Teralynx and the Intel Tofino. In 2023, the Silicon One G200 will offer a speed of 51.2 Tbit/sec.

In March 2020, SVP and GM of Enterprise Networking David Goeckeler left to become CEO of Western Digital. and was replaced by Todd Nightingale, head of Cisco Meraki. In October 2022, Cisco announced a partnership adding the Microsoft Teams app to its meeting devices.

In 2022, Cisco completely curtailed sales of its equipment in Russia due to Russian invasion of Ukraine, and completely discontinued service for already-sold devices. In April 2023, it became known that the company had destroyed equipment, spare parts, and even vehicles and office furniture worth 1.86 billion rubles (about $23 million) due to the impossibility of re-exporting. In February 2023, Cisco also wrote off the debt of the Russian mobile operator MTS in the amount of 1.234 billion rubles. As expected, these are unpaid amounts for previous equipment deliveries. In 2023, Cisco announced plans to begin manufacturing equipment in India.

On 15 February 2024, Cisco announced it would lay off more than 4,000 employees, or 5% of its global workforce, and lowered its annual revenue forecast due to economic challenges and reduced demand from telecom and cable service providers.

On 24 April 2024, Chuck Robbins, CEO of Cisco, met with Pope Francis and signed the Rome Call for AI ethics at the Vatican, endorsing the document's principles for responsible and ethical AI use.

Finance

For the fiscal year 2023, Cisco reported earnings of US$12.6 billion, with an annual revenue of US$57 billion, an increase of 10.6% over the previous fiscal cycle. Cisco's shares traded at over $43 per share, and its market capitalization was valued at US$213.2 billion in September 2018.

Corporate structure

Acquisitions and subsidiaries

Cisco acquired a variety of companies to spin products and talent into the company. In 1995–1996 the company completed 11 acquisitions. Several acquisitions, such as Stratacom, were one of the biggest deals in the industry when they occurred. During the Internet boom in 1999, the company acquired Cerent Corporation, a start-up company located in Petaluma, California, for about US$7 billion. It was the most expensive acquisition made by Cisco to that date, and only the acquisition of Scientific Atlanta has been larger. In 1999, Cisco also acquired a stake for $1 billion in KPMG Consulting to enable establishing Internet firm Metrius founded by Keyur Patel of Fuse. Several acquired companies have grown into $1Bn+ business units for Cisco, including LAN switching, Enterprise Voice over Internet Protocol (VOIP) platform Webex and home networking. The latter came as result of Cisco acquiring Linksys in 2003 and in 2010 was supplemented with new product line dubbed Cisco Valet.

Cisco announced on January 12, 2005, that it would acquire Airespace for US$450 million to reinforce the wireless controller product lines.

Cisco announced on January 4, 2007, that it would buy IronPort in a deal valued at US$830 million and completed the acquisition on June 25, 2007. IronPort was best known for its IronPort AntiSpam, its SenderBase email reputation service and its email security appliances. Accordingly, IronPort was integrated into the Cisco Security business unit. Ironport's Senderbase was renamed as Sensorbase to take account of the input into this database that other Cisco devices provide. SensorBase allows these devices to build a risk profile on IP addresses, therefore allowing risk profiles to be dynamically created on http sites and SMTP email sources.

In 2010, Cisco bought Starent Networks (a mobile packet core company) for $2.9 billion and Moto Development Group, a product design consulting firm that helped develop Cisco's Flip video camera. Also in 2010, Cisco became a key stakeholder in e-Skills Week. In March 2011, Cisco completed the acquisition of privately held network configuration and change management software company Pari Networks.

Although many buy-ins (such as Crescendo Networks in 1993, Tandberg in 2010) resulted in acquisition of flagship technology to Cisco, many others have failed—partially or completely. For instance, in 2010 Cisco occupied a meaningful share of the packet-optical market, revenues were still not on par with US$7 billion price tag paid in 1999 for Cerent. Some of acquired technologies (such as Flip from Pure Digital) saw their product lines terminated.

Cisco Systems in Bengaluru, India

Munich, Germany

Oslo, Norway

Cisco campuses all over the world

Cisco announced on March 15, 2012, that it would acquire NDS Group for $5bn. The transaction was completed on July 30, 2012.

In January 2013, Cisco Systems acquired Israeli software maker Intucell for around $475 million in cash, a move to expand its mobile network management offerings. In the same month, Cisco Systems acquired Cognitive Security, a company focused on Cyber Threat Protection. Cisco also acquired SolveDirect (cloud services) in March 2013 and UK-based Ubiquisys (mobile software) in April 2013 for $310 million.

Cisco acquired cyber-security firm Sourcefire, in October 2013. On June 16, 2014, Cisco announced that it has completed the acquisition of ThreatGRID, a company that provided dynamic malware analysis and threat intelligence technology.

On June 17, 2014, Cisco announced its intent to acquire privately held Tail-f Systems, a leader in configuration management software.

On April 2, 2015, Cisco announced plans to buy Embrane, a software-defined networking startup. The deal will give Cisco Embrane's software platform, which provides layer 3–7 network services for things such as firewalls, VPN termination, server load balancers and SSL offload.

On May 7, 2015, Cisco announced plans to buy Tropo, a cloud API platform that simplifies the addition of real-time communications and collaboration capabilities within applications.

On June 30, 2015, Cisco acquired privately held OpenDNS, the company best known for its DNS service that adds a level of security by monitoring domain name requests.

On August 6, 2015, Cisco announced that it has completed the acquisition of privately held MaintenanceNet, the US-based company best known for its cloud-based contract management platform ServiceExchange. On the same month, Cisco acquired Pawaa, a privately held company in Bangalore, India that provides secure on-premises and cloud-based file-sharing software.

On September 30, 2015, Cisco announced its intent to acquire privately held Portcullis Computer Security, a UK-based company that provides cybersecurity services to enterprise clients and the government sectors.

On October 26, 2015, Cisco announced its intent to acquire ParStream, a privately held company based in Cologne, Germany, that provides an analytics database that allows companies to analyze large amounts of data and store it in near real-time anywhere in the network.

On October 27, 2015, Cisco announced that it would acquire Lancope, a company that focuses on detecting threat activity, for $452.5 million in a cash-and-equity deal.

On June 28, 2016, Cisco announced its intent to acquire CloudLock, a privately held cloud security company founded in 2011 by three Israeli military veterans, for $293 million. The deal was expected to close in the first quarter of 2017.

In August 2016, Cisco announced it is getting closer to making a deal to acquire Springpath, the startup whose technology is used in Cisco's HyperFlex Systems. Cisco already owns an undisclosed stake in the hyper-converged provider. In September 2023, Cisco announced discontinuation of its HyperFlex infrastructure products.

In January 2017, Cisco announced they would acquire AppDynamics, a company that monitors application performance, for $3.7 billion. The acquisition came just one day before AppDynamics was set to IPO.

On January 26, 2017, Cisco founded the Innovation Alliance in Germany with eleven other companies bringing together 40 sites and 2,000 staff to provide small businesses in Germany with expertise.

On August 1, 2017, Cisco completed the acquisition of Viptela Inc. for $610 million in cash and assumed equity awards. Viptela was a privately held software-defined wide area network (SD-WAN) company based in San Jose, Ca.

On October 23, 2017, Cisco Systems announced it would be acquiring Broadsoft for $1.9 Billion to further entrench itself in the cloud communication and collaboration area.

On August 7, 2020, Cisco completed its acquisition of network intelligence company ThousandEyes.

On October 1, 2020, Cisco announced that it would be acquiring Israeli startup Portshift for a reported $100 million.

On December 7, 2020, Cisco announced that it would be acquiring Slido to improve Q&A, polls and engagement in WebEx videoconferencing

On December 7, 2020, Cisco announced the acquisition of U.K based IMImobile in a $730M deal.

On May 3, 2021, Cisco completed its acquisition of Q&A and polling platform Slido, which they offered both as a standalone product and with integrations.

In 2023, Cisco acquired the following cybersecurity companies: Valtix, Lightspin, and Armorblox. Cisco also announced its intention to acquire networking and security startup Isovalent later that year.

On September 21, 2023, Cisco announced the acquisition of cybersecurity firm Splunk in a $28 billion deal, its biggest acquisition yet, and the acquisition is announced to be completed on March 18, 2024.

Ownership

As of 2017 Cisco Systems shares are mainly held by institutional investors (The Vanguard Group, BlackRock, State Street Corporation and others).

Facilities

Cisco is headquartered in San Jose, California at 170 West Tasman Dr. with dozens of buildings comprising its corporate campus. Over 15,000 full-time employees are based at the San Jose campus and the surrounding Bay Area. Cisco's second largest campus in the United States is located at Research Triangle Park in North Carolina with 7,000 employees spanning across 12 buildings.

In August 2020, Cisco announced the creation of a new 130,000 square feet Midwest headquarters in Chicago at the Old Chicago Main Post Office accommodating 1,200 employees. Cisco maintains over 200 corporate offices in more than 80 countries.

In July 2021, Cisco announced all employees the option to work remotely on a permanent basis.

Products and services

Cisco SG300-28 Rackmount switch (top) and Cisco EPC-3010 modem (bottom)

Cisco's products and services focus on three market segments—enterprise, service provider, midsize and small business.

Cisco provides IT products and services across five major technology areas: networking (including Ethernet, optical, wireless and mobility), security, collaboration (including voice, video, and data), data center, and the Internet of things.

Cisco has grown increasingly popular in the Asia-Pacific region over the last three decades and is the dominant vendor in the Australian market with leadership across all market segments. It uses its Australian office as one of the main headquarters for the Asia-Pacific region.

VoIP services

Cisco became a major provider of Voice over IP to enterprises and is now moving into the home user market through its acquisitions of Scientific Atlanta and Linksys.

Hosted Collaboration Solution (HCS)

Cisco partners can offer cloud-based services based on Cisco's virtualized Unified Computing System (UCS). A part of the Cisco Unified Services Delivery Solution that includes hosted versions of Cisco Unified Communications Manager (UCM), Cisco Unified Contact Center, Cisco Unified Mobility, Cisco Unified Presence, Cisco Unity Connection (unified messaging) and Cisco Webex Meeting Center.

Certifications

Cisco headquarters in the North San Jose Innovation District

Cisco Systems also sponsors a line of IT professional certifications for Cisco products. There are five (path to network designers) levels of certification: Entry (CCT), Associate (CCNA/CCDA), Specialist(Cisco Certified Specialist), Professional (CCNP/CCDP), Expert (CCIE/CCDE) and recently Architect (CCAr: CCDE previous), as well as eight different paths, Collaboration, CyberOps, Data Center, DevNet, Enterprise, Security, and Service Provider .

A number of specialist technicians, sales, and datacenter certifications are also available.

Cisco also provides training for these certifications via a portal called the Cisco Networking Academy. Qualifying schools can become members of the Cisco Networking Academy and then provide CCNA level or other level courses. Cisco Academy Instructors must be CCNA certified to be a CCAI certified instructor.

Cisco is involved with technical education in 180 countries with its Cisco Academy program. In March 2013, Cisco announced its interest in Myanmar by investing in two Cisco Networking Academies in Yangon and Mandalay and a channel partner network.

Corporate affairs

Awards and accolades

In 2010, Secretary of State Hillary Clinton awarded Cisco the Secretary of State's Award for Corporate Excellence, which was presented in Jerusalem by Ambassador James B. Cunningham to Cisco Senior Manager Zika Abzuk.

Cisco products, including IP phones and Telepresence, have been seen in movies and TV series. The company was featured in the documentary film Something Ventured which premiered in 2011.

Cisco was a 2002–03 recipient of the Ron Brown Award, a U.S. presidential honor to recognize companies "for the exemplary quality of their relationships with employees and communities". Cisco ranked number one in Great Place to Work's World's Best Workplaces 2019. In 2020, Fortune magazine ranked Cisco Systems at number four on their Fortune List of the Top 100 Companies to Work For in 2020 based on an employee survey of satisfaction.

According to a report by technology consulting firm LexInnova, Cisco was one of the leading recipients of network security-related patents with the largest portfolio within other companies (6,442 security-related patents) in 2015.

Sponsorship

In February 2021, Webex signed a multi-year partnership with McLaren Racing as the Official Collaboration Partner of the team. In the following year, the partnership was extended to Cisco as the Official Technology Partner of the team. In October 2023, Cisco was announced as the Official Primary Partner of the McLaren F1 Academy programme. Cisco's branding will be carried on Bianca Bustamante's car, race suit and team kit in the 2024 F1 Academy season.

See also

In Spanish: Cisco Systems para niños